CFO Patrick Cheng (upper right) holding Chinabank's award certificate, with ICRG Head Alexander Escucha and representatives of other awardee banks.
China Banking Corporation (Chinabank) emerged as one of the country’s strongest banks in 2021 amid the challenges of COVID-19, landing The Asian Banker’s Top 500 Strongest Banks ranking as the second strongest bank in the Philippines in terms of balance sheet. Chinabank is also in the top 20% of the 500 strongest banks in the Asia Pacific region. The virtual awarding ceremony was held on October 21, 2021.
The Asian Banker cited Chinabank as having the lowest gross non-performing loans (NPL) ratio among Philippine banks included in the Asian Banker 500, at 2.3% as of December 2020, while its gross NPL cover exceeded the ideal 100% threshold. Meanwhile, the Bank achieved higher profitability following a decline in cost-to-income ratio to 49% from 59%, and an increase in return on assets to 1.2% from 1.1%. Apart from the 30% rise in net interest income, fee-based income also grew 19% on the back of better trading and securities gains. In addition, the robust capital and liquidity position helped improve overall balance sheet strength.
The Bank’s Common Equity Tier 1 (CET1) ratio and total Capital Adequacy Ratio (CAR) stood at 13.82% and 14.73%, respectively, as of end-2020.
“Chinabank’s performance not only shows our resilience, but also our improving financial strength. We are leveraging our resources and digital capabilities to help our customers weather the impact of the global pandemic and to support economic recovery,” Chinabank Chief Finance Officer Patrick D. Cheng said.
Chinabank has built a solid reputation of being one of the most trusted and best performing institutions in the country.
Last September, Moody's Investors Service affirmed Chinabank’s investment grade credit rating of Baa2 with a stable outlook on the basis of the Bank’s sustained, strong capitalization, profitability, and liquidity. Local debt watcher PhilRatings also gave Chinabank the highest credit rating of PRS Aaa (corp.), with a stable outlook. The rating takes into account Chinabank’s established track record and resiliency, strong and experienced shareholders who have navigated the bank through various changes in the economic environment, sound funding profile, lower interest expense that will support short-term profit performance, and more than satisfactory asset quality with ample capital buffer.
Earlier this year, Chinabank, for its performance in the ASEAN Corporate Governance Scorecard (ACGS), was distinguished by the ASEAN Capital Markets Forum as among the top 3 publicly-listed companies in the Philippines and among the top 20 in ASEAN, and as an ASEAN Asset Class. The Institute of Corporate Directors, the domestic ranking body of the ACGS, awarded Chinabank the Four Golden Arrow recognition, the highest award given to assessed Philippine companies. The Bangko Sentral ng Pilipinas (BSP) also named Chinabank as an outstanding stakeholder in recognition of its strong support for the BSP’s programs and initiatives to build an inclusive and increasingly digital Philippine economy.
On the Bank’s 100th anniversary in 2020, Chinabank Mobile App won the Mobile Banking & Payment Initiative of the Year-Philippines award from the Asian Banking & Finance. The app’s Pay to Mobile or JUMP (Just Use your Mobile Phone) feature enables payments and fund transfers to anyone with a mobile phone number—safe and convenient amid the pandemic and quarantine restrictions.
The Bank’s investment banking arm has likewise proven its leadership in the debt capital markets space. Chinabank Capital was named by Finance Asia as the Best DCM House in the Philippines for three years straight (2018 - 2020), and by The Asset as the Best Bond Adviser in the Philippines for five years in a row (2016 - 2020). The Investment House Association of the Philippines likewise distinguished Chinabank Capital as the Best Fixed Income House in 2018 and 2020.
The Asian Banker rigorously evaluates the financial strength of banks and financial holding companies across the Asia Pacific, Africa, and the Middle East using a detailed and transparent scorecard. The Asian Banker 500 ranking is widely followed by investors, analysts, and the media as the leading source for the assessment of the financial strength of commercial banks and financial holding companies in the region.
For its Asia Pacific ranking, The Asian Banker covers Australia, Bangladesh, Brunei, Cambodia, China, Hong Kong, India, Indonesia, Japan, Kazakhstan, Macau, Malaysia, Myanmar, New Zealand, Pakistan, Philippines, Singapore, South Korea, Sri Lanka, Taiwan, Thailand, and Vietnam. The ranking gives a bird’s-eye view of the institutions’ balance sheet growth and profitability against the uncertainties of economic conditions.